Correlation Between IQuest Co and DB Financial
Can any of the company-specific risk be diversified away by investing in both IQuest Co and DB Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IQuest Co and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and DB Financial Investment, you can compare the effects of market volatilities on IQuest Co and DB Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IQuest Co with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest Co and DB Financial.
Diversification Opportunities for IQuest Co and DB Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IQuest and 016610 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and IQuest Co is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on IQuest Co are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of IQuest Co i.e., IQuest Co and DB Financial go up and down completely randomly.
Pair Corralation between IQuest Co and DB Financial
Assuming the 90 days trading horizon IQuest Co is expected to under-perform the DB Financial. In addition to that, IQuest Co is 1.51 times more volatile than DB Financial Investment. It trades about -0.02 of its total potential returns per unit of risk. DB Financial Investment is currently generating about 0.03 per unit of volatility. If you would invest 420,171 in DB Financial Investment on September 12, 2024 and sell it today you would earn a total of 99,829 from holding DB Financial Investment or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. DB Financial Investment
Performance |
| Timeline |
| IQuest Co |
| DB Financial Investment |
IQuest Co and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest Co and DB Financial
The main advantage of trading using opposite IQuest Co and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest Co position performs unexpectedly, DB Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DB Financial will offset losses from the drop in DB Financial's long position.| IQuest Co vs. Samsung Electronics Co | IQuest Co vs. Samsung Electronics Co | IQuest Co vs. LG Energy Solution | IQuest Co vs. SK Hynix |
| DB Financial vs. KB Financial Group | DB Financial vs. Shinhan Financial Group | DB Financial vs. Hana Financial | DB Financial vs. Woori Financial Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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